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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                          to                     .  
Commission File Number: 001-38358
INSEEGO CORP.
(Exact name of registrant as specified in its charter)
Delaware 81-3377646
(State or Other Jurisdiction
of Incorporation or Organization)
 (I.R.S. Employer
Identification No.)
12600 Deerfield Parkway, Suite 100 
AlpharettaGeorgia30004
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (858812-3400
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per shareINSGNasdaq Global Select Market
Preferred Stock Purchase Rights
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No 
The number of shares of the registrant’s common stock outstanding as of August 4, 2020 was 97,159,678.



TABLE OF CONTENTS
 
 Page
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.




PART I—FINANCIAL INFORMATION
Item 1.  Financial Statements.
INSEEGO CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value and share data)
 June 30,
2020
December 31,
2019
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$42,100  $12,074  
Accounts receivable, net of allowance for doubtful accounts of $1,669 and $2,133, respectively40,556  19,656  
Inventories, net20,173  25,290  
Prepaid expenses and other11,876  7,117  
Total current assets114,705  64,137  
Property, plant and equipment, net of accumulated depreciation of $16,909 and $16,017, respectively12,198  10,756  
Rental assets, net of accumulated depreciation of $12,781 and $12,791, respectively4,704  5,385  
Intangible assets, net of accumulated amortization of $44,886 and $33,223, respectively45,642  44,392  
Goodwill28,030  33,659  
Right-of-use assets, net6,248  2,657  
Other assets385  387  
Total assets$211,912  $161,373  
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable$49,239  $26,482  
Accrued expenses and other current liabilities18,569  17,861  
Convertible 5.5% senior notes, net2    
DigiCore bank facilities126  187  
Total current liabilities67,936  44,530  
Long-term liabilities:
Convertible 3.25% senior notes, net176,171    
Convertible 5.5% senior notes, net  101,334  
Term loan, net  46,538  
Deferred tax liabilities, net3,101  3,949  
Other long-term liabilities6,632  2,380  
Total liabilities253,840  198,731  
Commitments and Contingencies
Stockholders’ deficit:
Preferred stock, par value $0.001; 2,000,000 shares authorized:
Series E Preferred stock, par value $0.001; 39,500 and 10,000 shares designated, respectively, 35,000 and 10,000 shares issued and outstanding, respectively, liquidation preference of $1,000 per share (plus any accrued but unpaid dividends)    
Common stock, par value $0.001; 150,000,000 shares authorized, 97,018,396 and 81,974,051 shares issued and outstanding, respectively97  82  
Additional paid-in capital686,410  584,862  
Accumulated other comprehensive loss(15,783) (3,879) 
Accumulated deficit(712,558) (618,303) 
Total stockholders’ deficit attributable to Inseego Corp.(41,834) (37,238) 
Noncontrolling interests(94) (120) 
Total stockholders’ deficit(41,928) (37,358) 
Total liabilities and stockholders’ deficit$211,912  $161,373  
See accompanying notes to unaudited condensed consolidated financial statements.
3




INSEEGO CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
 
 Three Months Ended
June 30,
Six Months Ended
June 30,
 2020201920202019
Net revenues:
IoT & Mobile Solutions$66,243  $39,983  $106,624  $72,764  
Enterprise SaaS Solutions14,446  15,908  30,905  31,683  
Total net revenues80,689  55,891  137,529  104,447  
Cost of net revenues:
IoT & Mobile Solutions53,223  33,986  86,087  61,586  
Enterprise SaaS Solutions5,466  6,350  12,215  12,546  
Total cost of net revenues58,689  40,336  98,302  74,132  
Gross profit22,000  15,555  39,227  30,315  
Operating costs and expenses:
Research and development10,540  5,188  18,764  8,673  
Sales and marketing8,648  7,229  17,403  13,620  
General and administrative7,396  7,464  14,558  13,938  
Amortization of purchased intangible assets753  857  1,579  1,728  
Total operating costs and expenses27,337  20,738  52,304  37,959  
Operating loss(5,337) (5,183) (13,077) (7,644) 
Other income (expense):
Loss on debt conversion and extinguishment, net(67,241)   (75,174)   
Interest expense, net(3,160) (5,142) (6,540) (10,217) 
Other income (expense), net787  (72) 1,765  241  
Loss before income taxes(74,951) (10,397) (93,026) (17,620) 
Income tax provision (benefit)(115) 322  (24) 570  
Net loss(74,836) (10,719) (93,002) (18,190) 
Less: Net loss (income) attributable to noncontrolling interests6  (60) (26) (74) 
Net loss attributable to Inseego Corp.(74,830) (10,779) (93,028) (18,264) 
Series E preferred stock dividends(835)   (1,227)   
Net loss attributable to common shareholders$(75,665) $(10,779) $(94,255) $(18,264) 
Per share data:
Net loss per common share:
Basic and diluted$(0.78) $(0.14) $(1.01) $(0.24) 
Weighted-average shares used in computation of net loss per common share:
Basic and diluted96,487,344  78,844,666  93,680,846  76,618,142  

See accompanying notes to unaudited condensed consolidated financial statements.
4



INSEEGO CORP.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
(Unaudited)
 
 Three Months Ended
June 30,
Six Months Ended
June 30,
 2020201920202019
Net loss$(74,836) $(10,719) $(93,002) $(18,190) 
Foreign currency translation adjustment1,576  1,790  (11,904) 1,207  
Total comprehensive loss$(73,260) $(8,929) $(104,906) $(16,983) 
See accompanying notes to unaudited condensed consolidated financial statements.

5




 
INSEEGO CORP.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(In thousands)
(Unaudited)

Preferred StockCommon StockAdditional
Paid-in Capital
Accumulated
Other
Comprehensive Income (Loss)
Accumulated DeficitNoncontrolling InterestsTotal
Stockholders’ Deficit
SharesAmountSharesAmount
Balance, March 31, 2019  $  78,699  $79  $558,208  $(5,460) $(585,302) $(121) $(32,596) 
Net income (loss)—  —  —  —  —  —  (10,779) 60  (10,719) 
Foreign currency translation adjustment—  —  —  —  —  1,790  —  —  1,790
Exercise of stock options, vesting of restricted stock units and stock issued under employee stock purchase plan—  —  240    517  —  —  —  517  
Taxes withheld on net settled vesting of restricted stock units—  —  —  —  (206) —  —  —  (206) 
Issuance of common shares—  —  46    241  —  —  —  241  
Share-based compensation—  —  —  —  3,645  —  —  —  3,645  
Balance, June 30, 2019  $  78,985  $79  $562,405  $(3,670) $(596,081) $(61) $(37,328) 
Balance, March 31, 202037  $  96,180  $96  $682,047  $(17,359) $(636,893) $(88) $27,803  
Net loss
—  —  —  —  —  —  (74,830) (6) (74,836) 
Foreign currency translation adjustment—  —  —  —  —  1,576  —  —  1,576  
Exercise of stock options, vesting of restricted stock units and stock issued under employee stock purchase plan—  —  838  1  1,662  —  —  —  1,663  
Taxes withheld on net settled vesting of restricted stock units—  —  —  —  (208) —  —  —  (208) 
Repurchase of Series E preferred stock(2) —  —  —  (2,354) —  —  —  (2,354) 
Share-based compensation
—  —  —  —  4,428  —  —  —  4,428  
Series E preferred stock dividends—  —  —  —  835  —  (835) —    
Balance, June 30, 202035  $  97,018  $97  $686,410  $(15,783) $(712,558) $(94) $(41,928) 
6



INSEEGO CORP.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(In thousands)
(Unaudited)
Preferred StockCommon StockAdditional
Paid-in Capital
Accumulated
Other
Comprehensive Income (Loss)
Accumulated DeficitNoncontrolling InterestsTotal
Stockholders’Deficit
SharesAmountSharesAmount
Balance, December 31, 2018  $  73,980  $74  $546,230  $(4,877) $(577,817) $(135) $(36,525) 
Net income (loss)
—  —  —  —  —  —  (18,264) 74  (18,190) 
Foreign currency translation adjustment—  —  —  —  —  1,207  —  —  1,207  
Exercise of stock options, vesting of restricted stock units and stock issued under employee stock purchase plan—  —  737  1  915  —  —  —  916  
Taxes withheld on net settled vesting of restricted stock units—  —  —  —  (318) —  —  —  (318) 
Exercise of warrants—  4,222  4  10,635  —  —  —  10,639  
Issuance of common shares
—  —  46    241  —  —  —  241  
Share-based compensation
—  —  —  —  4,702  —  —  —  4,702  
Balance, June 30, 2019  $  78,985  $79  $562,405  $(3,670) $(596,081) $(61) $(37,328) 
Balance, December 31, 2019
10  $  81,974  $82  $584,862  $(3,879) $(618,303) $(120) $(37,358) 
Net income (loss)
—  —  —  —  —  —  (93,028) 26  (93,002) 
Foreign currency translation adjustment—  —  —  —  —  (11,904) —  —  (11,904) 
Exercise of stock options, vesting of restricted stock units and stock issued under employee stock purchase plan—  —  967  1  1,711  —  —  —  1,712  
Taxes withheld on net settled vesting of restricted stock units—  —  —  —  (281) —  —  —  (281) 
Issuance of Series E preferred stock
25  —  —  —  25,000  —  —  —  25,000  
Issuance of Series E preferred stock in lieu of interest2  —  —  —  2,330  —  —  —  2,330  
Repurchase of Series E preferred stock(2) —  —  —  (2,354) —  —  —  (2,354) 
Issuance of common shares in connection with private exchanges of Inseego convertible 5.5% senior notes—  —  13,739  14  66,073  —  —  —  66,087  
Exercise of warrants—  —  338    1,861  —  —  —  1,861  
Share-based compensation
—  —  —  —  5,981  —  —  —  5,981  
Series E preferred stock dividends—  —  —  —  1,227  —  (1,227) —    
Balance, June 30, 202035  $  97,018  $97  $686,410  $(15,783) $(712,558) $(94) $(41,928) 


See accompanying notes to unaudited condensed consolidated financial statements.
7



INSEEGO CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
 20202019
Cash flows from operating activities:
Net loss$(93,002) $(18,190) 
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization9,692  7,208  
Provision for bad debts, net of recoveries74  385  
Provision for excess and obsolete inventory, net of recoveries180  336  
Share-based compensation expense5,981  4,702  
Amortization of debt discount and debt issuance costs3,245  4,886  
Fair value adjustment on derivative instrument(826)   
Loss on debt conversion and extinguishment, net75,174    
Deferred income taxes10  (17) 
Other158  680  
Changes in assets and liabilities:
Accounts receivable(21,498) 688  
Inventories2,725  (4,608) 
Prepaid expenses and other assets(5,298) (1,208) 
Accounts payable22,334  (3,861) 
Accrued expenses, income taxes, and other5,713  (1,056) 
Net cash provided by (used in) operating activities4,662  (10,055) 
Cash flows from investing activities:
Purchases of property, plant and equipment(2,831) (2,973) 
Proceeds from the sale of property, plant and equipment235  454  
Additions to capitalized software development costs and purchases of intangible assets(10,637) (8,801) 
Net cash used in investing activities(13,233) (11,320) 
Cash flows from financing activities:
Gross proceeds from the issuance of convertible 3.25% senior notes100,000    
Payment of issuance costs related to convertible 3.25% senior notes(2,544)